When Grameen Bank commenced operations in 1983, its goal was to alleviate poverty in rural Bangladesh by providing collateral-free business loans to the poorest of the poor. Given the traditional view that the poor are not credit-worthy, Grameen's unconventional approach to micro lending initially encountered widespread skepticism. By providing access to credit and capital and encouraging a disciplined approach to business, Grameen has provided Bangladesh's poor with the opportunity to benefit directly from free enterprise and self-employment.

In 1995, Grameen Bank embarked on a new mission that was equally radical. Driven by the belief that poverty is accentuated by lack of information, the Bank began investigating the benefits of telecommunications access. Grameen Telecom, a not-for-profit enterprise was established to spearhead development of mobile telephony in the rural areas of Bangladesh.

Bangladesh's infrastructure remains very inadequate and underdeveloped. The rural areas are not connected by good roads or any other form of communication. As a consequence, the rural population and in particular the poor households in the villages have remained isolated from the cities and the urban markets. Bangladesh has a population of about 140 million, and a density of about 2,000 people living in every square kilometer. Yet tele-density in Bangladesh is one of the lowest in the world. The rural areas, having 80% of the population, are practically devoid of any telephones. If the poor in the villages could be given access to telecommunications to obtain information for their business or personal transactions, then there would be faster development in the rural areas.

The objectives of Grameen Telecom are as follows:

• Provide easy access to telephone services all over Bangladesh.
• Initiate new income earning opportunities for the villagers, especially the Grameen Bank borrowers, who now became the village phone operators.
• Gradually spread the information revolution in the rural areas, and introduce telecommunication as a powerful new weapon to fight poverty.

The Village Phone Programme has witnessed rapid expansion in recent years as shown in the tables below:

The Story of Rashida Khatun
For Rashida Khatun, an outspoken and enthusiastic female client of Grameen Telecom and a long time borrower of Grameen Bank, life was not always as good as it was now. Like most Bangladeshis, she was born into poverty and was deprived of the basic opportunity to go to a school. Because of the dire financial straits of her parents, she was married off at a very young age to a poor man. Kayamat Ali, her husband owned a makeshift tea stall and the income generated from this business barely covered their living expenses. To add to their burden, Rashida gave birth to a daughter and the three of them huddled together to live in utter squalor. For making a living and to get out of the poverty, Rashida knew that she had to look for other income earning opportunities. But the birth of her second daughter put things on hold again. Hearing about Grameen Bank’s program in her village, in 1993, Rashida joined a credit group. After training, she initially borrowed Tk. 5,000 to start a business for selling cloth door to door. With her husband’s earnings from the tea stall and the profit she was making from selling sarees, Rashida managed to save some money and bought a plot of land and erected their own home. Later, she expanded the house to add three more rooms to her house, which she rented out, earning a net profit of Tk. 900 per month.

But Rashida’s entrepreneurial activities did not stop there. She heard about Village Phone Program and wanted to get a mobile phone connection. Finally in 2002, after taking part in an extensive training and orientation programme, she decided to venture into this business. With her perfect repayment record, Rashida very easily qualified for a loan that helped her set up her mobile phone business in a rented store in the market where she was also managing her textile business.

The Village Phone Program increased Rashida’s family’s standard of living further. With a whopping Tk.2,000 additional earning every month from her phone business, she bought a TV for her family as well as a cassette player for her daughters. Her biggest achievement was sending her daughters to school, something that her husband and she could not dream of earlier. Her eldest daughter is now in her third year of college and the younger one is in the eighth grade. The latter now dreams to go to an engineering school after finishing high school.

Apart from the financial and economic benefits attained by Rashida Khatun’s family, her business also had tremendous impact on the community where she lived. Telecommunication services provided by her, have helped connect the people in her locality, with families and friends in other parts of the country and even abroad. Families of expatriate workers in the Middle East, Malaysia and elsewhere, can contact their emigrant family members, whenever they want to and let them know about their well being. One such customer at Rashida’s phone booth whose brother works in Saudi Arabia, voiced his appreciation for the ingenious program. “Before, we had to rely on other people in the city who had phones to let us know when and where my brother would send us money. Sometimes, these people did not even inform us and we faced difficulty for lack of funds. Now due to Rashida’s mobile phone, all the information is readily available to us, just a phone call away.”

Grameen Bank’s microcredit and Village Phone Program have helped ensure better quality of life for Rashida Khatun. It gave her the opportunity to realize a broader set of human capabilities and make her family a model to follow in the locality.